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Moody’s gives Baa1 to Altria notes
Moody's Investors Service said it assigned a Baa1 rating to Altria Group Inc.'s senior unsecured notes offering.
All other ratings remain unchanged and the outlook is stable.
Net proceeds will be used for general corporate purposes.
Moody’s said the ratings reflect Altria’s significant scale and the low price elasticity of demand of its principal U.S. cigarette business, the considerable franchise value of its leading premium cigarette, smokeless and other tobacco brands, as well as its strong profitability and stable cash flows. The company's significant SABMiller equity stake provides an incremental source of liquidity and earnings diversification.
The ratings also reflect the company's limited geographic diversification with the preponderance of its sales in the U.S., reliance on the declining cigarette segment, as well as ongoing litigation, regulatory and tax risk.
Moody's expects that over time, Altria's organic growth rate will improve as more of its revenue is generated by its smokeless, cigar and wine businesses.
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